Investor Sentiment Ticks Up

The John Hancock Investor Sentiment Index rose slightly in
the final quarter of 2013, reaching +22 from +20 observed in Q3. The index ended
2013 four points higher than in Q4 of 2012, and seven points higher than the
same period in 2011.

A bigger jump in enthusiasm was measured for retirement plan
investments, index results show. At the end of Q4 2013, more than eight in 10 (83%)
investors agreed that now is a good time to invest in 401(k) plans, compared
with 73% favoring such investments a year ago.

Investments made within individual retirement accounts (IRAs)
showed a similar uptick. At the end of Q4 2013, 81% of surveyed investors
agreed that now is a good time to invest in an IRA, up from 72% a year ago.

Looking generally at stock market investments, positive attitudes
rose to 60% in Q4 of 2013, compared with 55% in the third quarter of the year. A majority of investors (56%) also remain positive
on stock mutual funds—a level that is significantly higher than the fourth
quarter of 2012, when 45% of respondents had favorable views of such funds.

Optimism
held steady for investing in lifestyle or target-risk funds, both at 39%. Optimism
around target-date funds also remained steady, at 35%.

Investors remain negatively disposed toward bonds, with 39% saying
now is a bad time to invest in fixed-income instruments. Sixty-four percent
said staying in cash should also be avoided at this time.

The share of investors who believe they are in a better
financial position now compared with two years ago rose to 52% in the last quarter, up
10 points from the fourth quarter of 2012.

Other results included in the index report show there are several
issues that are consistently worrying investors—especially those engaged in retirement
planning.

A top concern, explains Bill Cheney, John Hancock’s chief economist,
is being able to afford quality healthcare (66%), even though the share of
investors who express healthcare concerns is down about five percentage points from the third quarter of
2013.

Investors also frequently mention that they are at least
somewhat concerned about being able to afford nursing home or long-term care if
needed (59%). Others worry about running out of money in retirement (52%), and
about experiencing a substantial decline in assets just before retiring (45%).